What happens to my mortgage when I sell my house?
When you sell your house, your solicitor usually uses the sale proceeds to repay the outstanding mortgage and any applicable early repayment or exit charges. If the sale price exceeds the amount owed, you receive the remaining equity; if it falls short, you may need to agree with your lender how to cover the shortfall.
Your mortgage remains active until the sale completes, even if you have accepted an offer. The lender’s legal charge is removed as part of completion, when your conveyancer obtains the amount needed to settle the account and arranges payment from the sale funds.
Before completion, your conveyancer will normally:
- ask the lender for a redemption statement;
- check the amount required to repay the mortgage on the proposed completion date;
- identify any further secured borrowing linked to the property, such as a second charge or additional loan; and
- prepare a completion statement showing the money received, the mortgage payment, conveyancing costs and other relevant deductions.
A redemption statement is date-specific. It can include the remaining capital, interest calculated up to the intended repayment date and charges permitted under your mortgage terms. If completion is delayed, an updated statement may be needed because the amount can change.
You should continue making the contractual mortgage payments until your lender or conveyancer confirms that the account has been settled. Cancelling a direct debit too early could leave a payment outstanding. After completion, check that the lender has confirmed closure of the mortgage account and that any related direct debit is no longer required.
If you want to move the mortgage to another property, ask the lender about porting before committing to the sale. Porting is not automatic: the lender may reassess your circumstances, the new property and the amount you want to borrow. The mortgage secured against the property being sold still has to be dealt with on completion, while any replacement borrowing is arranged separately.
For a joint mortgage, both borrowers are generally involved in the sale and the repayment arrangements. A lender may require the consent or signatures of all borrowers before releasing its charge. If one borrower is unavailable, separated from the other borrower or disputing the sale, obtain legal advice before exchanging contracts.
Where there are arrears, missed payments or other issues with the mortgage account, tell your conveyancer and lender promptly. These matters can affect the redemption figure and the information needed to complete the transaction. Do not assume that selling the property removes responsibility for the mortgage before completion.
Once the lender has been paid, your conveyancer deals with the formal release of the lender’s charge and completes the transfer to the buyer. Ask for a copy of the final completion statement and retain confirmation that the mortgage has been redeemed. If you are selling through a direct cash buyer, the same mortgage redemption and conveyancing requirements still apply; the difference is the type of buyer and transaction route, not the lender’s right to be repaid.
After completion, check your lender’s records as well as your conveyancer’s paperwork. The mortgage account should show as redeemed, and any credit balance or final adjustment should be explained in the completion statement. Keep the redemption statement, completion statement and confirmation of discharge with your property records in case a future lender, solicitor or credit-reference check requires evidence that the borrowing was settled.